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Savory snacks market comfort eats its way to growth despite difficult economic conditions
Despite the residual effects of the 2008 financial crisis still being felt in many nations around the world, particularly in Europe, consumer demand for savory snacks has continued to show growth, not only in developing countries but also developed nations.
The global savory snacks market grew by 5.3% in 2012, to reach a value of $89.6 4illion, representing a compound annual growth rate of 5.0% for the period spanning 2008-2012. The Americas proved to have the largest share of the market, with 44.7% of the total value in 2012, Asia-Pacific followed with 30.0% and Europe in third with 23.2%.
Growth was driven evenly across Europe and the Asia-Pacific regions, remarkably the powerhouse that is China showed lower growth than the Czech Republic, although forecasts suggest China’s growth will outstrip that of the Czech Republic’s during 2012-2017. South America has displayed exceptional growth with Argentina, Colombia and Venezuela all showing double digit increase. However, Brazil has displayed the most conservative growth of the South American region, with just 6.2% compared to Argentina’s 15.6% for 2012.
Global forecasts for the 2012-2017 period suggest that growth in the savory snacks market is likely to continue at a similar rate as it did during 2008-2012. Forecasts for Europe show a marginal deceleration in growth rates are expected, with the slowdown in the Asia-Pacific region more pronounced with an anticipated 1.1% drop in growth. This is primarily fuelled by Japan’s forecasted deceleration suggesting growth will become marginal during 2012-2017.
As consumer demographics and lifestyles change in developing regions, such as India, China and Brazil, the opportunities for savory snack manufacturers will increase, as purchasing power, particularly amongst the young, increases. This is likely to entice leading companies from developed nations into the developing regions.
In developed countries, the savory snacks markets tends to be quite consolidated, with typical market players being diverse multi-national conglomerates such as Pepsi, the Kellog Company and Kraft Foods. These companies have a diverse portfolio of products, and have the financial muscle and negotiating power to enter new markets and exploit favorable market conditions in developing countries. Furthermore, smaller companies that find a niche in the savory snacks market often find themselves subject to acquisitions by the larger corporations, if they successfully establish themselves, resulting in a consolidation of the market.
For more, please read our ‘Savory Snacks Industry Reports’.